Slim's America Movil says rivals get unfair 'subsidies' in Mexico

Reuters Staff

3 Min Read

MEXICO CITY, Nov 13 (Reuters) - Mexico’s America Movil on Monday said it would push back against “regulatory subsidies” for its rivals, less than two weeks after authorities said the telecommunications company could start charging other companies again for connecting to its network.

Earlier this month, Mexico’s telecoms regulator, the Federal Institute of Telecommunications (IFT), said America Movil would be permitted to charge rivals for so-called interconnection fees, ending a more than three-year stretch when it collected nothing.

The decision weakened a central pillar of a 2014 telecoms reform that sought to bolster competition by giving competitors such as AT&T Inc and Telefonica SA free use of a network that Slim built up from the former state monopoly he acquired in the 1990s.

But Telcel, America Movil’s mobile phone subsidiary, said in a statement that it still cannot charge enough relative to its rivals.

“Telcel is analyzing the means of challenge within its reach to continue its defense in the face of unjustified regulatory subsidies, including compensation for the damages and harms occasioned by said subsidies,” the company said in a statement.

A spokesman for the IFT did not immediately respond to a request for comment.

According to the rates published by the IFT, America Movil will be permitted to charge 0.028562 peso per minute for mobile calls to its network as of Jan. 1. Competitors will be able to charge 0.112799 peso per minute for calls to their networks.

Created by Slim in 2000, America Movil later swallowed its parent Telmex, and by the end of last year, it held about two-thirds of Mexico’s mobile subscriptions, according to IFT data.

Competitors had urged the regulator to keep the zero interconnection rate for calls to America Movil’s network , or something close to it. After the IFT announced its rates for 2018, AT&T released a statement saying the decision harmed both consumers and America Movil’s rivals.

Although the new rates narrow the gap between America Movil and its competitors considerably, Slim’s firm argued they were unfair.

The rates published by the IFT allow America Movil to charge less relative to its rivals than the regulator had permitted in 2014, though competition in the market has increased, the company said in its statement.

The rates are also without comparison internationally, the statement added. (Reporting by Julia Love; editing by Frank Jack Daniel and Tom Brown)